Ch11+-+Equity

Ch11+-+Equity - Chapter 11 Stockholders Equity...

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Unformatted text preview: Chapter 11 Stockholders Equity Characteristics of a corporation Characteristics of stock Issuing common stock Treasury stock Cash dividends, stock dividends and stock splits Preferred stock 11-1 Characteristics of a corporation 11-2 1. Publicly-held corporations May have many stockholders. Stock is traded on a national exchanges (NYSE, etc.) Example: DineEquity 2. Privately-held corporations Usually have only a few stockholders. Does not offer its stock for sale to the general public. Example: Levi Strauss Classification of Corporations 11-3 Advantages of a Corporation 11-4 Advantages of a corporation Continuous life Easy to transfer ownership Provides limited liability What is the maximum liability? How is this done? What does this mean? Disadvantages of a Corporation 11-5 Disadvantages of a corporation Double taxation of earnings Government regulations Corporate management Why is this an issue? What laws impact companies? Who is taxed? Separate Legal Entity Because a corporation is a separate legal entity , it can . . . Own assets Sue and be sued Incur liabilities Enter into contracts 11-6 Stockholders Rights 1. Vote : in person or by proxy. 11-7 1. Dividends : proportionate distribution of profits. 1. Preemptive right : keep the same percentage ownership when new shares are issued. 1. Residual claim : Proportionate distributions of assets in a liquidation Corporate Organization Chart Elected by shareholders Appointed by directors Vice President Operations Vice President Marketing Vice President Finance Vice President President Chairman and Board of Directors Stockholders Personnel 11-8 Stockholders Equity Components DineEquity December 31, 2008 (Amounts in $000s except per share data) 11-9 Stockholders' equity Preferred stock, $1 par value, 220,000 shares authorized, 190,000 shares issued and outstanding . 87,050 Common stock, $.01 par value, 40,000,000 shares authorized, 23,696,950 shares issued and 17,466,355 shares outstanding ... 237 Additional paid-in-capital 165,315 Retained earnings 145,810 Treasury stock, at cost (6,230,595 shares) (276,519) Other (29,408) Total Stockholders equity 42,767 Characteristics of stock 11-10 Authorized, Issued, and Outstanding Capital Stock The maximum number of shares of capital stock that can be sold to the public....
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Ch11+-+Equity - Chapter 11 Stockholders Equity...

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